Estimate of the arc price elasticity of demand

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Reference no: EM131242625

Angelica Pickles is manager of a Quick Copy franchise in White Plains, New York. Pickles projects that by reducing copy charges from 5¢ to 4¢ each, Quick Copy's $600-per-week profit contribution will increase by one-third:

a. If average variable costs are 2¢ per copy, calculate Quick Copy's projected increase in volume.

b. What is Pickles' estimate of the arc price elasticity of demand for copies.

Reference no: EM131242625

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